Noble Corporation Reports First Quarter 2010 Earnings of $1.43 per Diluted Share
ZUG, Switzerland, April 21 /PRNewswire-FirstCall/ -- Noble Corporation (NYSE: NE) today reported first quarter 2010 earnings of $371 million, or $1.43 per diluted share, versus $414 million, or $1.58 per diluted share, for the first quarter of last year. Contract drilling services revenues for the first quarter 2010 were $809 million versus $872 million in first quarter 2009. Contract drilling margins for the first quarter 2010 were approximately 68.5 percent and the Company generated $504 million in net cash provided by operating activities in the quarter. Noble invested $339 million in capital projects during the quarter.
“In spite of the continued strength in oil prices throughout the quarter, the contracting environment remains challenging,” said David W. Williams, Chairman, President and Chief Executive Officer. “Nevertheless, we believe Noble remains well positioned. We have a strong backlog with quality customers, liquidity in excess of $1.4 billion, and we remain diligent in our attention to controlling costs. As we enter our 90th year of business, we will continue to focus on advancing our culture of safety, maintaining high levels of service for our customers and delivering value to our shareholders.”
During the first quarter, Noble repurchased approximately 2.1 million shares at an average cost per share of $42.21. At the end of the first quarter 2010, the Company had approximately 10.8 million shares remaining on its existing repurchase authorization.
Operations Highlights
At the end of the first quarter 2010, approximately 55 percent of the Company’s available rig operating days were committed for the remainder of 2010 and approximately 28 percent were committed for 2011. The Company’s total backlog at March 31, 2010 was approximately $7.5 billion.
A major milestone was reached recently in the Company’s fleet expansion program. The Noble Dave Beard, the Company’s newbuild 10,000 foot ultra-deepwater, dynamically-positioned semisubmersible rig, commenced operations in Brazil under a five-year drilling contract with Petrobras on March 19, 2010. The Beard joins Noble’s fleet of three drillships and two semisubmersibles currently working in the area.
About Noble Corporation
Noble is a leading offshore drilling contractor for the oil and gas industry. Noble performs, through its subsidiaries, contract drilling services with a fleet of 62 offshore drilling units (including two rigs currently under construction) located worldwide, including in the Middle East, India, the U.S. Gulf of Mexico, Mexico, the Mediterranean, the North Sea, Brazil, and West Africa. Noble’s shares are traded on the New York Stock Exchange under the symbol “NE”. Additional information on Noble Corporation is available via the worldwide web at http://www.noblecorp.com.
Statements regarding earnings, costs, revenue, rig demand, fleet performance, contract commitments, dayrates, contract commencements, contract extensions or renewals, newbuilds, fleet expansion or composition, industry fundamentals, global economic conditions, financial strength, contract backlog, customer base, future performance, growth opportunities, market outlook, as well as any other statements that are not historical facts in this release, are forward-looking statements that involve certain risks, uncertainties and assumptions. These include but are not limited to operating hazards and delays, risks associated with operations outside of the U.S., actions by customers and other third parties, factors affecting the level of activity in the oil and gas industry, supply and demand of drilling rigs, factors affecting the duration of contracts, the actual amount of downtime, factors that reduce applicable dayrates, violations of anti-corruption laws, hurricanes and other weather conditions, the future price of oil and gas and other factors detailed in the Company’s most recent Form 10-K, Form 10-Q’s and other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated.
Conference Call
Noble also has scheduled a conference call and webcast related to its first quarter 2010 results on Thursday, April 22, 2010, at 8:00 a.m. U.S. Central Daylight Time. Interested parties are invited to listen to the call by dialing 1-866-461-7129 within the U.S. or outside the U.S. +1-706-679-3084, using access code: 38609936 or by asking for the Noble Corporation conference call. Interested parties may also listen over the Internet through a link posted in the Investor Relations section of the Company’s Web site at www.noblecorp.com.
A replay of the conference call will be available on Thursday, April 22, 2010, beginning at 10:00 a.m. U.S. Central Daylight Time, through Thursday, April 29, 2010, ending at 5:00 p.m. U.S. Central Daylight Time. The phone number for the conference call replay within the U.S. is 1-800-642-1687 or, for calls from outside of the U.S., + 1-706-645-9291, using access code: 38609936. The replay will also be available on the Company’s Web site following the end of the live call. The conference call may include non-GAAP financial measures. Noble will post a reconciliation of any such measures to the most directly comparable GAAP measures in the “Investor Relations” section of the Company’s Web site under the heading “Regulation G Reconciliations.”
NOBLE CORPORATION AND SUBSIDIARIES | ||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||
(In thousands, except per share amounts) | ||||||
(Unaudited) | ||||||
Three Months Ended | ||||||
March 31, | ||||||
2010 | 2009 | |||||
Operating revenues | ||||||
Contract drilling services | $ 808,646 | $ 872,397 | ||||
Reimbursables | 24,233 | 16,678 | ||||
Labor contract drilling services | 7,761 | 6,934 | ||||
Other | 211 | 142 | ||||
840,851 | 896,151 | |||||
Operating costs and expenses | ||||||
Contract drilling services | 254,431 | 240,856 | ||||
Reimbursables | 19,743 | 14,083 | ||||
Labor contract drilling services | 5,888 | 4,376 | ||||
Depreciation and amortization | 115,857 | 92,984 | ||||
Selling, general and administrative | 21,971 | 17,717 | ||||
(Gain)/loss on asset disposal/involuntary conversion, net | - | 12,034 | ||||
417,890 | 382,050 | |||||
Operating income | 422,961 | 514,101 | ||||
Other income (expense) | ||||||
Interest expense, net of amount capitalized | (465) | (521) | ||||
Interest income and other, net | 3,626 | 1,072 | ||||
Income before income taxes | 426,122 | 514,652 | ||||
Income tax provision | (55,396) | (100,357) | ||||
Net income | $ 370,726 | $ 414,295 | ||||
Net income per share | ||||||
Basic | $ 1.44 | $ 1.58 | ||||
Diluted | $ 1.43 | $ 1.58 | ||||
NOBLE CORPORATION AND SUBSIDIARIES | ||||||
CONSOLIDATED BALANCE SHEETS | ||||||
(In thousands) | ||||||
(Unaudited) | ||||||
March 31, | December 31, | |||||
2010 | 2009 | |||||
ASSETS | ||||||
Current assets | ||||||
Cash and cash equivalents | $ 847,710 | $ 735,493 | ||||
Accounts receivable | 622,213 | 647,454 | ||||
Prepaid expenses and other current assets | 122,017 | 100,243 | ||||
Total current assets | 1,591,940 | 1,483,190 | ||||
Property and equipment | ||||||
Drilling equipment and facilities | 8,979,100 | 8,666,750 | ||||
Other | 151,319 | 143,477 | ||||
Total property and equipment | 9,130,419 | 8,810,227 | ||||
Accumulated depreciation | (2,265,497) | (2,175,775) | ||||
Net property and equipment | 6,864,922 | 6,634,452 | ||||
Other assets | 277,240 | 279,254 | ||||
Total assets | $ 8,734,102 | $ 8,396,896 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
Current liabilities | ||||||
Accounts payable | $ 249,847 | $ 197,800 | ||||
Accrued payroll and related costs | 89,824 | 100,167 | ||||
Taxes payable | 80,013 | 68,760 | ||||
Other current liabilities | 62,543 | 67,220 | ||||
Total current liabilities | 482,227 | 433,947 | ||||
Long-term debt | 750,987 | 750,946 | ||||
Deferred income taxes | 299,787 | 300,231 | ||||
Other liabilities | 146,564 | 123,340 | ||||
Total liabilities | 1,679,565 | 1,608,464 | ||||
Commitments and contingencies | ||||||
Shareholders' equity | ||||||
Shares | 1,118,742 | 1,130,607 | ||||
Retained earnings | 6,238,901 | 5,855,737 | ||||
Treasury shares | (242,459) | (143,031) | ||||
Accumulated other comprehensive loss | (60,647) | (54,881) | ||||
Total shareholders' equity | 7,054,537 | 6,788,432 | ||||
Total liabilities and shareholders' equity | $ 8,734,102 | $ 8,396,896 | ||||
NOBLE CORPORATION AND SUBSIDIARIES | ||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||
(In thousands) | ||||||
(Unaudited) | ||||||
Three Months Ended | ||||||
March 31, | ||||||
2010 | 2009 | |||||
Cash flows from operating activities | ||||||
Net income | $ 370,726 | $ 414,295 | ||||
Adjustments to reconcile net income to net cash from | ||||||
operating activities: | ||||||
Depreciation and amortization | 115,857 | 92,984 | ||||
(Gain)/loss on asset disposal/involuntary conversion, net | - | 12,034 | ||||
Deferred income tax provision | (444) | 4,545 | ||||
Share-based compensation expense | 8,100 | 8,400 | ||||
Pension contributions | (1,574) | (1,290) | ||||
Net change in other assets and liabilities | 11,269 | 16,866 | ||||
Net cash from operating activities | 503,934 | 547,834 | ||||
Cash flows from investing activities | ||||||
New construction | (141,404) | (135,576) | ||||
Other capital expenditures | (179,044) | (89,505) | ||||
Major maintenance expenditures | (18,316) | (25,639) | ||||
Accrued capital expenditures | 54,476 | (47,259) | ||||
Net cash from investing activities | (284,288) | (297,979) | ||||
Cash flows from financing activities | ||||||
Payments of long-term debt | - | (172,700) | ||||
Proceeds from options exercised | 2,443 | 177 | ||||
Dividends/par value reduction payments | (11,935) | (10,470) | ||||
Repurchases of employee shares for taxes | (9,285) | (5,563) | ||||
Repurchases of shares | (88,652) | (60,867) | ||||
Net cash from financing activities | (107,429) | (249,423) | ||||
Net increase in cash and cash equivalents | 112,217 | 432 | ||||
Cash and cash equivalents, beginning of period | 735,493 | 513,311 | ||||
Cash and cash equivalents, end of period | $ 847,710 | $ 513,743 | ||||
NOBLE CORPORATION AND SUBSIDIARIES | |||||||||||||||||||
FINANCIAL AND OPERATIONAL INFORMATION BY SEGMENT | |||||||||||||||||||
(In thousands, except utilization amounts, operating days and average dayrates) | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Three Months Ended March 31, | Three Months Ended December 31, | ||||||||||||||||||
2010 | 2009 | 2009 | |||||||||||||||||
Contract | Contract | Contract | |||||||||||||||||
Drilling | Drilling | Drilling | |||||||||||||||||
Services | Other | Total | Services | Other | Total | Services | Other | Total | |||||||||||
Operating revenues | |||||||||||||||||||
Contract drilling services | $ 808,646 | $ - | $ 808,646 | $ 872,397 | $ - | $ 872,397 | $ 894,184 | $ - | $ 894,184 | ||||||||||
Reimbursables | 23,303 | 930 | 24,233 | 16,156 | 522 | 16,678 | 36,199 | 1,035 | 37,234 | ||||||||||
Labor contract drilling services | - | 7,761 | 7,761 | - | 6,934 | 6,934 | - | 8,455 | 8,455 | ||||||||||
Other | 211 | - | 211 | 127 | 15 | 142 | 253 | - | 253 | ||||||||||
$ 832,160 | $ 8,691 | $ 840,851 | $ 888,680 | $ 7,471 | $ 896,151 | $ 930,636 | $ 9,490 | $ 940,126 | |||||||||||
Operating costs and expenses | |||||||||||||||||||
Contract drilling services | $ 254,431 | $ - | $ 254,431 | $ 240,856 | $ - | $ 240,856 | $ 264,012 | $ - | $ 264,012 | ||||||||||
Reimbursables | 18,869 | 874 | 19,743 | 13,589 | 494 | 14,083 | 31,967 | 987 | 32,954 | ||||||||||
Labor contract drilling services | - | 5,888 | 5,888 | - | 4,376 | 4,376 | - | 4,928 | 4,928 | ||||||||||
Depreciation and amortization | 113,173 | 2,684 | 115,857 | 90,898 | 2,086 | 92,984 | 110,054 | 2,613 | 112,667 | ||||||||||
Selling, general and administrative | 21,743 | 228 | 21,971 | 17,667 | 50 | 17,717 | 19,297 | 64 | 19,361 | ||||||||||
(Gain)/loss on asset disposal/involuntary conversion, net | - | - | - | 12,034 | - | 12,034 | - | (214) | (214) | ||||||||||
$ 408,216 | $ 9,674 | $ 417,890 | $ 375,044 | $ 7,006 | $ 382,050 | $ 425,330 | $ 8,378 | $ 433,708 | |||||||||||
Operating income | $ 423,944 | $ (983) | $ 422,961 | $ 513,636 | $ 465 | $ 514,101 | $ 505,306 | $ 1,112 | $ 506,418 | ||||||||||
Operating statistics | |||||||||||||||||||
Jackups: | |||||||||||||||||||
Average Rig Utilization | 81% | 86% | 81% | ||||||||||||||||
Operating Days | 3,141 | 3,242 | 3,218 | ||||||||||||||||
Average Dayrate | $ 116,498 | $ 158,359 | $ 131,975 | ||||||||||||||||
Semisubmersibles - (6,000 feet or greater): | |||||||||||||||||||
Average Rig Utilization | 90% | 100% | 100% | ||||||||||||||||
Operating Days | 661 | 630 | 721 | ||||||||||||||||
Average Dayrate | $ 484,510 | $ 369,988 | $ 450,459 | ||||||||||||||||
Semisubmersibles - (less than 6,000 feet): | |||||||||||||||||||
Average Rig Utilization | 100% | 100% | 100% | ||||||||||||||||
Operating Days | 270 | 270 | 276 | ||||||||||||||||
Average Dayrate | $ 250,254 | $ 246,118 | $ 254,820 | ||||||||||||||||
Drillships: | |||||||||||||||||||
Average Rig Utilization | 92% | 62% | 100% | ||||||||||||||||
Operating Days | 247 | 168 | 276 | ||||||||||||||||
Average Dayrate | $ 222,306 | $ 291,854 | $ 269,615 | ||||||||||||||||
Submersibles: | |||||||||||||||||||
Average Rig Utilization | 0% | 67% | 0% | ||||||||||||||||
Operating Days | - | 180 | - | ||||||||||||||||
Average Dayrate | $ - | $ 58,452 | $ - | ||||||||||||||||
Total: | |||||||||||||||||||
Average Rig Utilization | 81% | 86% | 83% | ||||||||||||||||
Operating Days | 4,319 | 4,490 | 4,491 | ||||||||||||||||
Average Dayrate | $ 187,214 | $ 194,308 | $ 199,122 | ||||||||||||||||
NOBLE CORPORATION AND SUBSIDIARIES | |||||
CALCULATION OF BASIC AND DILUTED NET INCOME | |||||
(In thousands, except per share amounts) | |||||
(Unaudited) | |||||
The following table sets forth the computation of basic and diluted net income per share: | |||||
Three months ended | |||||
March 31, | |||||
2010 | 2009 | ||||
Allocation of net income | |||||
Basic | |||||
Net income | $ 370,726 | $ 414,295 | |||
Earnings allocated to unvested share-based payment awards | (3,476) | (3,461) | |||
Net income to common shareholders - basic | $ 367,250 | $ 410,834 | |||
Diluted | |||||
Net income | $ 370,726 | $ 414,295 | |||
Earnings allocated to unvested share-based payment awards | (3,461) | (3,454) | |||
Net income to common shareholders - diluted | $ 367,265 | $ 410,841 | |||
Weighted average number of shares outstanding - basic | 255,122 | 259,266 | |||
Incremental shares issuable from assumed exercise of stock options | 1,099 | 564 | |||
Weighted average number of shares outstanding - diluted | 256,221 | 259,830 | |||
Weighted average unvested share-based payment awards | 2,381 | 2,188 | |||
Earnings per share | |||||
Basic | $ 1.44 | $ 1.58 | |||
Diluted | $ 1.43 | $ 1.58 | |||
SOURCE Noble Corporation
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